>> not really. >> it's hard, isn't it? and it's daunting and it's challenging and the landscape. >> why does he love comcast? >> i wasn't going to say that because i'm not quite as shameless as you. i just saw a piece in the "post." >> bill miller, thanks for being here. >> thanks a lot. >> "squawk on the street" begins right now. good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. we are in a partial government shutdown for the first time in 17 years. futures are working their way through it. gold actually down $35 today after a very long night in washington, as we also kick off the 4th quarter. ten-year yields around 2.63,

2.64. our road map begins with with the fax shutting down for the first time in 17 years. 800 federal workers furloughed. >> merck cutting an additional 8,500 jobs, aiming to reduce annual operating costs by $2.5 billion. >> all of that. plus more and "mad money"'s big milestone tonight. >> first, the federal government has begun a government shutdown. 800,000 federal workers will be furloughed today with national parks, smithsonian, museums, most federal offices closing. we mentioned what gold is doing. why -- how is the market trying to arbitrage this, jim? >> i think this is one of the crux of things. europe is getting stronger,

japan had some good things. futures percolate, this morning they were up 8 and now they've been cut in half. as they've been cut in half people say this is a great opportunity again, i'll sell again and buy lower. and up opening in the face, this, there's a lot of people who think is going to be resolved by friday. i was with my friend who say do not believe this is going to be resolved by friday. this is death match. if he's right, it's right to sell. >> friday is a pay day for federal workers so there is some hope they get this resolved before those checks have to be forgone. in the meantime, prison guards, border patrol agents are being asked to work without pay. >> i've had to work without pay because i've worked for some crummy company. but they live paycheck to paycheck in this country.

>> we call them interns. >> no, when i was on strike i worked for free. >> exactly. i do wonder, gold is down 2.5%. >> what the heck is that? talk about complacency? gold is not trading the way it's supposed to. >> a couple of people pointing that out. 2.3% right now. >> this country, i always find congress, as usual, out of touch, but we've seen no income growth in this country. we've seen people carry two and three jobs. i mean, we're being told -- i was looking at a paycheck statement, listen, your paycheck may be impacted but the federal paycheck is bad. am i thinking do they not stand the ripples of trying to have to go to denny's and get tating th

grand slam because you can only eat once a day? >> if the real concern is the debt ceiling discussion, it makes a debt ceiling discussion more likely. do you think that's true? >> at a certain point there will be a majority rule. these people in seats who may not demand a -- the people who are pro shutdown, they say don't you dare describe me as pro shutdown but of course they're pro shutdown. you're not allowed to characterize them because they get very angry. remember hamilton? >> alexander? >> he was cool. he was good about paying the

debt. remember lincoln -- >> he's very close. >> remember lincoln when he defaulted, he used to call himself the national debt guy. these guys, didn't they tack that class? remember you had to take that class over and over again like the founding fathers. >> so who is aaron burr? >> i know who aaron paul is, i don't know who aaron burr is. i think the president goes right to the supreme court on this issue. >> the white house has said they would not do. >> everybody does everything they're say they're not going to do. you can't not pay the debt! >> only thing boehner has to do is take a vote. >> it's only one guy. victor cruz. there's two cruzzes. one going to have a bad sunday. >> cruz is in charge. it's interesting how quickly can you get in charge these days.

i was talking to chris, he said guy came from nowhere and now he's in the super bowl. it's amazing how fluid things are down there versus our world in business where you got to pay your dues before you get to become a ceo. but the role of business is much more serious. it's like real -- there's like real things happening in business. down there it's like, hey, no budget, no appropriation, no nothing. >> my favorite headline today, "washington post," everybody's got it across the front but the "post" takes their style section page and that's all you need to say, three letters. >> imagine if you're in business and they say we're not going to pay you today but come to work, though. >> but it's about the debt ceiling. it's the countdown now to two weeks from now, let's call it, if we're not there and if there doesn't seem to be a prospect for lifting the debt ceiling where one would imagine we're going to see a great deal more

volatility/perhaps weakness. >> you want our bonds to trade through the bonds of italy. i mean, people who -- >> when do the chinese just say, all right -- >> i think they've been blown out. >> enough already. enough already, guys. >> maybe bernanke. >> we're the largest foreign creditor. >> maybe bernanke care about taking credit, he's like the ace in the hole. >> boehner. when do this very a conversation. forget obama. call him. >> i see jamie $11 billion dimon is down there trying to explain -- >> he's been down there a lot these days, usually at the justice department. but i think that what we got down there, we got some guys saying, listen, there's these bond auctions, they're hard to sell if we're selling defaulted paper. i once sold a piece of bethlehem defaulted steel defaulted paper.

>> how'd that go? >> i lost about half my client base. >> i went to the meeting, everybody said you pick up a couple hundred basis points. >> what were you thinking. >> i was thinking i didn't know jack. first year broker. >> you were taken. >> i got pantsed! the junk diesk, are they going o move over to the default des k?k >> i think paul singer will buy it all and take possession of our boats, of our gunboats. >> don't cry for me, united states. >> and he'll have ted olson working for him and they'll figure it out. >> you know, there's no bid. no bid. lots offered. can you imagine it's going to trade like a cdo?

treasuries like a cdo? >> a legendary fund manager striking a bullish tone on apple as well, calling it at biggest no-brainer in history. here's miller explaining why. >> it just makes no sense for apple to trade where it, is seven times enterprise value to free cash flow, 14% -- 10% simple free cash yield. if apple was a junk bond, it would trade 40% higher. >> he's right. >> day after a meeting between icahn and cook. we still don't know what happened. >> my guess -- i don't have an update. don't tweet, please. just don't say anything if you can avoid it, i think they probably asked carl. when it comes to bill miller's point of view and many others, it's the free cash yield. they talk about that and seize the power of the stock sometimes

and other times it doesn't because everybody is focused on growth. >> they should tell the tea party this is a good substitute for u.s. debt. full faith and credit of the iapple nation. they've got better cash flow than the federal government. >> i think they sold debt at a better level. >> the u.s. government defaults. apple has full faith and credit backed up by the iphone and 5s. they are. verizon is going to have better credit. what do you give a balance sheet for the u.s. government if they default? do they stand that -- i don't want to say tea party because they get mad. maybe the celestial tea party. chamomille. >> pass me the stevia. >> with ricin. >> you guys keep going there. >> why don't you just take a

break and watch the darn -- >> i'm trying to. i have how many episodes to go? >> there's 61 total. >> raising numbers netflix, mkm because of bb. "mad money" is m2k. >> let's talk about mrk. >> you think they're going to do an acquisition, don't you? >> i don't know if they're going to do an acquisition. >> also large cap activism. that is a back drop to all of these kinds of stories. i think you have to consider it and the board considers it when merck announces new workforce reductions, 8,500 positions, there were 7,500 previously as part of the drug maker's efforts to focus development. the company also reaffirmed

guidance for the current year and you add that to the 7,500, you're talking about 20%, 20% of the workforce at merck that has been or will be out of work. >> they never rationalized schering-plough, they're doing it now. people are working hard, not getting paid very well and then getting fired. at merck. right? they just moved to summit, new jersey. maybe i have to give these people -- they populate the inn. >> you have to focus your r & d. a lot of people have already focused these trims. >> we don't want restructure. you're not buying it for

restructure. celgene gives you growth and they're hiring. which do you prefer? growth and hiring or difficult left-ha -- dividend and firing? >> we know which it is. it's growth and hiring, to answer your rhetorical question. >> did you notice? that's because i had him on the show last night. he gave me his subtle approval right now. >> you're right. >> take it where you can get it. >> will this help? will this help? >> no. short-term pop. carl pointed out the number of failures of drug there is and then they bring in -- there's a head scientist, they bring in a guy from amgen. i mean, merck is a great american -- i remember when dr. vagelos -- irony of ironies is chairman now of regeneron.

and then they've come up with t the anti-cholesterol drug. >> can't get a ceo to come on. his son is like friendly with cliff mason, my head writer. he comes on and says, listen, i think we've got this drug and you only have to put a shot in your eye, half of the current guys make it so you have to shoot your eye twice. what would you rather have, one needle in the eye or twice? the stock keeps going up. now it's a diabetes macular degeneration story. when it rains, it poors. and len has been saying we have more in the pipeline. they have the next generation anti-cholesterol drug, for those of us who can't take the statins because it freezes our hands, makes us tingle. >> tingling. >> by the way, jim mentions "mad

money." we are celebrating a big milestone here at cnbc. we congratulate jim as tonight "mad money" airs its 2,000th episode. watch tonight's special program, 6:00 p.m. eastern time. i've been told "seinfeld" -- >> why does my sister come out and say soupy sales had more episodes? >> i think it's incredible. >> really? >> to be able to show up 2,000 times with the energy you do and have something to say every single time. not just something but good stuff. >> and remembering that prior to mad there was nothing like it. you'd done radio and you took a lot of your elements from radio and put them on tv. >> i wanted to do a one-man show about business, a song and dance show about business. no one had ever done it. it is something different, it

remains something different. it's about trying to explain this at home, 6:00. odd hour to be talking about business. you got to dress a little different, play a little different music and have a little different attitude you have to have a little 'tude. 2,000 hours without a ticker. that's something. >> and coming up, chairman william lauder will join us after he rings the opening bell. take one more look at futures as we take stock in the federal shutdown today. a lot more from "squawk on the street" at post 9 in just a moment.

amazon says it plans to fire 7 -- plans to hire 70,000 holiday employees. even someone as dogged as jcpenney has relatively good things to say about growth in e-commer e-commerce. >> e-commerce has come into its own. i think it's one of the reasons

th that fedex has been so teflon. everybody has to have a 360 channel, everyone has to have a twitter strategy, a facebook strategy. it's the era we're in. >> these are jobs that pay about $11 an hour, 70,000 jobs amazon is adding. >> $11. >> $11. that gets to the quality of job creation in the country, quality of recovery. >> $11. >> some of them become full time. >> but still, it's not -- >> that's not easy to live on. >> of course it brings to mind some. reports about walmart's inventory being cut. we still don't know whether or not that's true. maybe we'll get some sense when the quarter comes up. >> you did the age of walmart, which my daughter says is the greatest documentary. are you able to get a sense from a couple of walmarts how apparel

is doing? it always seems like a memo goes out and then the memo is refuted. that's a big central, organized company. >> it is. they've had stumbles in apparel. they moved their design center here to new york. they've tried a lot of different things at walmart so it's difficult. i'm not sure i would judge their stumbles as reflective overall, though we know right now apparel is very a very difficult -- >> everybody says apparel is difficult, everybody. >> cramer's "mad dash" is coming up next. dow and s&p are down seven of the past eight sessions. we'll see how q4 begins when "squawk on the street" comes back. >> he's been bringing main street to wall street for years. for "medical money"'s 2,000

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it's time for cramer's "mad dash." >> mkm partners is saying there's more opportunity. they think this is a $75 billion market cap. it's currently 18! they're saying take it 75. >> what valuation metrics are they working from to get to that number? every single person in the united states is going to have a netflix account, which may happen. >> they're talking about original programming. >> how did "breaking bad" get 10 million viewers when they started with one million? they're saying the networks are all worth a lot of money, this is a network but it's an international network. they're talking about u.k.

liking this. >> carl sitting down with apple. never too late. take me out of my stock at 23 billion because it's a $75 billion opportunity. >> apple generates that in a quarter. >> the u.s. government used to generate that but now apple -- >> bring on the fourth quarter. the opening bell is just four minutes away. for over 60,000 california foster children,

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breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. you're watching cnbc "squawk on the street." opening bell in about a minute. government partially shutdown. 800,000 government workers furloughed. good luck getting into yosemite today and it's also yosemite's birthday today. >> a lot of great things about these national parks. they're very inexpensive

vacations. it's a shame. people don't make a lot of money in this country and now a lot of people not getting paid. it's not a political statement. >> there is the opening bell. estee lauder speaking about breast cancer awareness month. hologic. apple, facebook and vodafone make up nearly half of the point gain. >> yesterday was interesting. the nasdaq was down the least of any point gain.

one of the reasons it's so hard to fathom in this market, how can the nasdaq stay up, even ahead of the shutdown. and the answer is that these companies have their -- apple is inexpensive, facebook has got the momentum, a lot of biotech there. this is regeneran, celldex, blessed with a lot of non-economic companies. >> phil lebeau has the auto sales tonight. >> ford auto sales, an increase of 5.8%, a little best than estimates on the street. these are the best september sales for ford since 2006. f-series truck sales up 10% last night. these numbers are not going to be blockbuster numbers not only for ford but all automakers because the calendar has two fewer selling days and you have

labor day included in the august numbers, not september. so, again, you have ford up 5.8% for the month of september. >> we also got chrysler earlier in the morning, right? >> chrysler up 1%, roughly in line with estimates. we'll get gm in about half an hour. >> we'll keep an eye on goldman sachs. berkshire hathaways will convert -- i can't unsee that hysenberg mask. >> everybody's got the hysenberg. >> instead of spending more money to exercise the warrants, he chose to take the profit in stock that he already had made on them so kept his position. he still will be one of the largest shareholders in goldman sachs, that is warren buffett

through berkshire at over about $2 billion. by the way, only buffett can get those deals back at the height of the crisis. he got a 10% discount to the stock price and he got a 10% yield on the preferred security with ge, with goldman, then he did the bank america deal. >> reputation. >> it helps. >> wag is the best gainer on the s&p. 73 cents, does beat by a penny. same-store sales up. >> the wall street journal has a column and they'll tell you exactly what's going wrong at a company and you'll often find that what's wrong at a company, if it doesn't happen again, and walgreens -- this column was saying, listen, it's the last one of the ones where they have the xpress scripts tiff.

next thing you now, the stock continues to go higher. the negative guys just don't have the ammo against walgreens. >> the alliance deal is out there, we talked about it before, that's the large company in the u.k. they're going to have one large shareholder, the guy who controls lyons boots. he's on the board of walgreens already, it will be interesting to see his influence. he'll be by far the largest shareholder. and when will they follow through on the alliance boots? it could be very soon. 2015 i think. >> greg watson really had a vision of changing the stores, vision of worldwide domination and i misjudged him. i was too conservative about what he was trying to do. we stood there, the stock was dropping at 28. i was wrong.

it was a great call by him. >> merck continues to be one of the big gainers as we talk about layoffs there. another company with layoffs has been cisco but that didn't stop john chambers from taking a bigger check. his pay doubles to 21 million. you pointed out, laying off those workers difficult optically, as business continues to be robust. >> i continue to believe in cisco, which my charitable trust owns. i think the telecommunication sales are good. i think that he is a guy who doesn't -- when he laid off the 4,000, he wasn't going to say he was having a blowout quarter. the compensation is equivalent to blowout. >> first day of the month, the journal takes a crack at sort of over time how you do if you own a stock on the last day of the month as opposed to buying it on the first day of the month. is this generally a day to go shopping? >> i don't like to buy off

openings. with my ira and then with my 401 k i like to do it 1/12, 1/12, 1/12. >> buffalo wild wing another one to wat to watch. talking about poor demand in general. >> there are some pretty good ads about mcdonald's wings. i know there are probably people that just lay in wait to hate mcdonald's wings are going to hurt buffalo's wings. >> jcpenney on the up side. we learned yesterday that the hedge fund had sold down a good deal of its position, had been as much of a 9% holder, now below the 5% threshold.

much of that selling took place late last week, perhaps answering some questions. yesterday i said i thought the big holders might still be in there but i was unclear not having spoken to them. one of the largest shareholders was a big seller. so that actually helping the stock price knowing that -- we'll see who sells yet to come or throws in the towel so to speak. it goes from 19 million shares to 10 million shares in. >> look at that walgreens. president going to speak? >> the president will make a statement at 10:25 a.m. the senate rejected this delay of the individual mandate that the house is trying to suggest. >> and they're laughing at us overseas, which i find much to my chagrin because we're a great country. when they snicker at what we're doing, it's painful. the minority of the minority

never want to say they're a guy of principles. >> as matthews pointed out this morning on the "today" show, some of the gerrymandering and some of these republicans are invincible and there's no reason to compromise. >> what's interesting is how about the ones in potential contested seats. the american people don't like this. did you ever hear the american people saying they're shutting down, i work for free, my company is strapped. nobody thinks for that. >> even from the right, mitch mcconnell, for example. >> i understand the redistricting. i just remember when engine charlie wilson, who was the former ceo of general motors, went to be the secretary of defense under eisenhower, it used to be that's the way the republicans used to be. they were capital.

the democrats were labor. the republicans stood for full faith and credit because they owned a lot of bonds. what, the republicans don't own any bonds anymore. what are they putting their money in? maybe the gold thing. >> let's go to bob pisani. dow up 28. >> good morning. happy tuesday. the government shuts down and all night long the futures are up. we've been down seven of the last eight days so we're due for a bounce. three areas may be affected by the shutdown, defense, housing, ipos. moody's said any delay in government payments would quickly weaken defense contractor liquidity. they say two especially exposed, lockheed martin and lieian tech syste -- lyons tech system, ltk.

contract awards could be delayed and appropriations funds may not be appropriated. the other area is the fha. one third of the mortgages in the united states. over the weekend it looked like they were going to shut the whole thing down, all the processes of the fha loans. they've reversed themselves and they say will have limited staff to process loans. they're going to lay off most of their employees. i don't know how they're going to pull this off. think-th they say there will be limited staffers to process loans. >> companies affected in home building, baezer, kb home, lennar, horton. >> the s.e.c., they say they're

open. the we have three big ipos and the s.e.c. has to sign off before they start trading tomorrow. we have burlingston stores, real estate firm remax and empire state building. this is the great jinx month, remember? 1927, 1987, 1997, 2008. it's also the great bear killer month. the bottom line is we have turned around many, many times in the month of october. talk more about that at 11:30. >> mary thompson has sot breme breaking news on fabrice tourre. >> he was found guilty of six charges related to security fraud.

his lawyers are asking that the trial -- or the case be thrown out or the trial be reset. we should note these kind of motions are procedural in nature. they are not always successful. this also doesn't mean that he can't appeal the decision. his lawyers can still appeal the decision, but that happens once the penalties are decided and that, of course, will not be decided for another month or so. nevertheless, his lawyers again asking a federal judge to throw out the case or set a new trial in the s.e.c.'s case against fabrice tourre. back to you. >> mary thompson, thank you very much. >> let's shift to rick santelli at the cme group in chicago. >> we basically held settlement and it has turned up a bit. once again, it seems as though normalcy is prevailing in the fixed income market.

yesterday we dipped under 260, today we traded as high as 266, 267 and here it sits. if you open the chart up for a couple months, you can see why we're spending time at this zone and you can see at the right side of the chart how issues with the fed meeting and the reason i picked july, because the july employment report released right after the 4th of july had a big impact on many markets, whether it was a dollar index or treasuries. now, the vix is talked about a lot these days. take a step back, get a little perspective. i know everybody wants to rorschach these markets and try to see a political issue within the marketplace, but a two-year chart of the vix, really hard to pull that out, isn't it? now, if we look at the dollar more specifically, let's look at a two-day chart of the dollar

index and you'll notice it did breach the 80 mark. this is very significant for you technicians out there. if you open the chart up to three month months, you can cle see it has been deteriorating, predicated on variables that are economic fundamentals. back to you. >> rick santelli, thank you very much. >> when we come back, we'll talk to william lauder, executive chairman of estee lauder when "squawk on the street" continues. ♪

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estee lauder rang the opening bell a few minutes ago at the exchange, kick off breast cancer awareness month, founded in 1993 has raised more than $450 million in 20 years. it's great to have you back, william. good morning. >> thanks, carl. >> nearly half a billion dollars in 20 years. there are no words. >> it's a pretty incredible mission that everybody has pulled together to raise money to try to find a cure. these researchers are brilliant. they're working very hard at making sure we can help women. when we started 20 years ago, a little more than 70% of women diagnosed with breast cancer had a likelihood of survival. today that number is 90%. our goal of course is to get to

100. >> a lot of it must have to do with what we know about mammograms and the timing of mammograms. >> it's not only detection and early detection, that has had a lot to do with it. when doctors say they see more patients in stage one, which is easier to treat, but the science itself, they know how to treat it in a much more targeted way. today many people affected by breast cancer, they don't have to stop working, they don't lose their hair. it's a bump in the road as opposed to a devastating moment. >> i've had a lot of biotech companies come on "mad money" and they're all doing targeted research. does your organization work with them on compassionate use? let's say they have something for somebody really in the fight of their lives? how do you get them in trials? are you doing that work? >> the foundation is focused on

funding the researchers doing the work to farm the effective treatments, identifying the markers and be able to pinpoint those key markers in the genes that trigger breast cancer or can help the body fight it on a permanent basis. the key thing is not just treat it and make it go away, but make sure the body isn't a host to allow it to come back or to metastasize someplace else. >> where is -- i saw hologic ring the bell today. where is awareness, not just in the major cities? >> we've come a long way in 20 years. i remember when i first wore this pink ribbon, people would come over and say i'm sorry to hear you have aids? no, this is a pink ribbon for breast cancer awareness. now we have football players banging each other to a pull of on sunday, they're going to be wearing different pink accents. i'm waiting to see whether any team is going to have a pink

jersey. they're focusing on the effort because we're all touched by breast cancer. >> while we have you here of course, you get a pretty good sense as to what's going on in the world given estee lauder's presence around the world. >> generally business is okay. i would say there are spots where it's better than okay and there are spots where it's struggling. this really follows what you would say, david, is the general obvious trends. europe is a little more challenges, especially the southern tiers of europe. further north gets a little better. u.k. is pretty good. we're seeing still strong demand and growing demand in the middle east. it continues to evolve. and we're starting to see an emergence in subsaharan africa

and asia continues to be strong, where even johnsapan, which hasn side ways for a long time is seeing small, incremental growth and the influence in china throughout the region is pretty strong. >> we hope you have a lot of pink ties to get you through the month. >> james's "six in 60" with cramer is next. uscany. [ man ] her parents didn't expect her dreams to be so ambitious. italy? oh, that's not good. [ man ] by exploring their options, they learned that instead of going to italy, they could use a home equity loan to renovate their yard and have a beautiful wedding right here while possibly increasing the value of their home. you and roger could get married in our backyard. it's robert, dad. [ female announcer ] come in to find the right credit options for your needs. because when people talk, great things happen.

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let's get jim's "six in 60" with the market roughly flat this morning. let's start with t-mobile. >> more cost paying customers. good for them. ugg stock has been nothing but up -- they had a couple of bad quarters of inventory. >> ubs? >> frankly, stock is not reacting but they're saying pc sales awful. >> under arm our. >> the competitive guy i've ever come across in business.

>> and morgan stanley. >> i don't like up a lot companies. up a lot companies tend to go up more. >> tonight is a big show. >> i want people to come down. >> you want people to come down to broad street. >> you can come down and see it, dunkin kind enough to come by, we'll talk about facebook, twitter and regina, our fabulous executive producer has been working all her magic about trying to make the show great tonight. >> do you look back at 2,000 episodes? >> and also 1,000. >> when you think about it, what has been your biggest success? >> the biggest success would be a thousand shows ago, april 9th of 2009 when people said the market was up big from the bottom i said, no, it's nowhere. we've got far more to go.

i will talk about that tonight and my nephew and head writer is cook up some of the manifesto. he and i have been back and forth since the show began. i love him. my sister's kid. >> and carson -- >> i idolize carson. that i'm even half the man, i'm proud. >> when we come back, ism, the shutdown can hold back the data. we'll get that after the break. at farmers we make you smarter about insurance, because what you dont know can hurt you. what if you didn't know that it's smart to replace washing-machine hoses every five years?

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some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪ his day of coaching begins with knee pain, when... [ man ] hey, brad, want to trade the all-day relief of two aleve for six tylenol? what's the catch? there's no catch.

you want me to give up my two aleve for six tylenol? no. for my knee pain, nothing beats my aleve. welcome back to "squawk on the street." right now we would break you breaking news on construction data but we cannot get that construction data because of the government shutdown so we only have ism. good morning, rick. >> ism for september, 56.2. 57.7 our last look was the best

since june of 2011. this is the best since april of 2011. if we look at internals, employment improved from 53.3 to 55.4, unlike the chicago number. and new orders, exactly the opposite, which did improve. so the ism data isn't bad. just this year alone we had one sub 50 and the last ten months we had two sub 50s. there's always anxiety this index. i agree, no construction sending. i guess there's an upside to having a monarchy, can you do things unilaterally. >> not sure the monarchy's first move was construction data. >> our senior economic reporter steve liesman is back at headquarters. steve? >> these are good numbers. the top line and internals are

good. rick did mention a decline in new orders but it remains at a very high level. any number over 62, 63 is a high number and this is still cooking along at 60. production up above 60, employment up, exports down a bit. that's something to watch perhaps. imports still at a high level but down a bit. this is good numbers internally. folks, put on your seat belts and go down the road of private sector data because that's what we have for the economy and the on thing really wrong with the private sector data is when it doesn't necessarily agree with the government data. this is what we'll have ism, adp on thursday. much debate about the potential effects of a government shutdown. most forecasters not pushing the panic button yet. here's a look at some of the economic effects. subtracts about 0.3 percent and points, maybe 0.1, 0.2, if this

lasts about a week from q4 gdp. remember, folks are going to get paid who are on furlough. that's one big impacts. the biggest unknown, the effects on the market and consumer sentiment. you can see the consumer sentiment dip back in '95. i just want to compare the debt ceiling debate on the next screen here. can you see a much bigger drop from a debt ceiling debate than there was from the government shutdown. again, they bounced back but you can see that big decline there, zeroed out there at the low. now, one other thing i want to -- inside the white house and on wall street, far more attention being paid to debt ceiling debate, which is seen as

having greater harmful effects on the economy. morgan stanley, thif there is gd news, negotiators would probably delay the next showdown. my standing from a washington force is that treasury secretary jack lew more focused on the debt ceiling debate right now because that's his primary area of responsibility. he's been watching the data very closely, daily and keeping congressional leaders informed about cash balances at the u.s. treasury. kelly? >> thank you very much, sir. in the mieantime, take two. john harwood joins us now with the latest out of the capital this morning. >> reporter: we just had the expected vote by the senate to kill on the party line vote

again, and that is the house offer to extend government funding if the senate would agree to go into conference and net on the demands that republicans have made. the senate rejected that offer, as harry reid said they would last night. now everyone is going to step back. there will are some discussions going on, i'm sure, but mostly now this is about waiting to see the most heat in this and that will trigger the resolution of this, carl. >> thank you for that progress report on the hill. house minority whip steny hoyer spoke on "squawk box" this morning. here what's he had to say. >> in this instance in particular, as i know previous people have said, we've agreed to a number for interim funding for the government at the levels set by our republican colleagues. they won't take yes for an answer and it's a very sad day for america. >> joining us now with his reaction, republican congressman mike kelly of pennsylvania.

congressman, good to have you with us this morning. >> thank you. thanks for having me. good to be with you. >> long couple of days. we know the senate a couple of times has rejected attempts to delay the mandate or repeal the tax. are they spinning their wheels? do you agree? how long will they continue to do that? >> it's very difficult to compromise when somebody won't join in the conversation. i think the house has done the responsible thing. i think it comes down to what's fair here? why do we have exclusive breaks for certain people and not all of america? i think the house represents the people. if we can't come to work, meet and do something fair for every single american and not just special ones like big business and not the individual, we're asking for the senate to sit down and do what's fair for the people who sent us here. that's so basic, so american, what part of that don't they

get? >> some more moderate gop members, i'm thinking of a john mccain, are apparently trying to tell the right wing of the party, look, guys, he's not going to repeal the aca, there needs to be a different path. are you just going to go head to head with that argument? >> i'm willing to hear what everybody has to say but i have to tell you the president has said many times i am willing to sit down with anybody who would come forward and have a great idea, except republicans. there's no republican idea he will accept. and it comes back to is it fair for the american people? i don't know what options are left for us. but, my goodness, if we can't come to an agreement that we all represent the american people. this is not about a republican or democrat agenda. this is about the american people suffering right now and overwhelmingly looking at this new law and saying it just doesn't make sense right now, i don't think we're ready for it. we've asked him to hold back. these are common sense things

they already agreed to. the medical device tax. they already agreed to it. now there's strong party lines. my question is why is it that republicans and republicans only are being looked at as they're the guys that don't want to do the right thing for america. that's exactly what we're trying to do. >> congressman, would you be willing to forego your salary for the extent of the period that nonessential government workers have to forego theirs? >> yes, you know what, i will do what's fair. if we're asking some of our people to take a cut, i'm fair with that. can you hold my salary, why wouldn't you? i'm not saying pay me, don't pay them. they're not paying them, don't pay me. i have no problem with that. >> the aca was upheld by the supreme court and there was an election in 2012 in which the democrats won a majority of the popular vote. why are you tying a government

shutdown to legislation that already had been decided? >> when judge roberts gave his final decision, he said we cannot prevent you from electing people to pass bad laws. the other part, when that was passed, 219 affirmatives, all from the democratic side. there were 212 nos on that. 34 of those nos were democrats. they didn't like the process either. it's not like we had this overwhelming thing. we were reelected, too. the americans re-elected republicans to represent the house of representatives. my goodness, you have the information in front of you. look at every single poll and you'll find out there's hardly any poll that's less than double digits where the american people say we don't like this law, it's cumbersome, we don't understand it and we need to hold up on it.

all we asked for was a delay, guys, asked for a delay, let's find out what it is about this law that's not ready. it's not ready today. why force it down the people's throats? >> what is happening today is the shutdown. you have the interesting experience of being not just a congressman but a business owner, big auto dealer in butler. do you think you're going to see some ancillary effect on your own business as a result of the shutdown? >> i don't know about that. but from running a business, there is priorities. keep in mind, these are nonessential jobs that we're talking about. the government is open today. the government is not shut down. if you're worried about your social check, you're going to get it. if you have a son or daughter in the military, in uniform, they're still going to get paid. medicare, medicaid, all those are taken care of. if you want to fly, the airports are open, the air traffic controllers are in their offices. what did get shut down, what the executive body decides is

nonessential jobs. when i ran my own business, i had to make decisions based on what was best for the people that i serve and that's mile-per-hour cumy customers. we always had cutbacks in tough times but we rebounded. we always did something that made sense. >> congressman, the debt ceiling fight is a couple of weeks away. you're fighting this one. that one also seems to be attached to opposition to obama care. you going to fight that as well? >> i think we should. i mean, my goodness, we're talking about the debt ceiling is the law. we better be dog gone sure that when we do this, we're doing the right thing for the american people. not just for today and the next election. how about the way the government is supposed to work and the way we're supposed to represent. this is not a republican agenda for me, guys. in is what the people of theins expect to us do. if we can't have these heavy debates, why the heck are we

here? i'm not going to go along to get along. i'm going to do the best for the people that sent me. that's my job. >> i think that's what a lot of people on your side are arguing today. congressman mike kelly, thanks for your time. >> the question is how long will it last as the shutdown continues and how about the debate on the debt ceiling? >> kelly, how are you? >> i'm great. i can't say the same for nonessential employees. >> the s&p has a fairly nice rebound taking place, it's up about a third of a percent. it is the first day of the month. maybe that's accounting for some of the action. but you're in the camp that's going to keep buying through all of this. why? >> yes, and using any pullback like we've had in the past three weeks to commit cash to the

market. there's still plenty of cash on the sidelines, this is you'll fuel for a continued bull market. this has involved a lot of hysteria from washington so there's a lot of emotion, but we look at that time as a very normal course and a very healthy part of an ongoing bull market. look, kelly, we have been here before. >> yup. we have been here. but i was just going to say given the rhetoric coming out of washington this morning, the fact that no one can tell for certain whether the shutdown makes the debt ceiling agreement more or less likely in the near term, people have compared the debt ceiling like a lehman-like event. there seems to be a disconnect. either it's not that serious or no one thinks it's going to happen. what is it? >> i think you have to separate

the political rhetoric, which is all done for effect. i don't think this is going to be a lehman-like event because there's so much discussion about it. there's no surprise or shock value here. ev even if we don't get a debt ceiling agreement at what the appropriate date is, it will be very, very temporary, won't cause a cataclysmic collapse in the financial system. that is all rhetoric. >> the thing about breaching the debt ceiling is that to some extent it doesn't matter about duration, it just matters whether or not we do it. go ahead. >> no one believes that the united states is going to default on its obligation. no one believes it. we are the richest, most powerful country in the world. whether we breach the debt ceiling for a day or two or a

week, it doesn't take away we are the wealthiest country in the world and treasuries will remain the safest asset class. >> and in the case of a downgrade or if some rating agencies decide to cut us down a new hampshi notch again and our interest levels rise, do we say it's okay, we're still the richest country in the world? >> carl in the summer of 2011, the s&p downgraded the treasury de debt and the interest rates declined. >> is that because the s&p fell? >> it's interesting. the equity market was much more sensitive but historically the bond market is a much -- a better gauge of financial problems than the stock market. and, let's face it, the bond market was right in 2011, not the stock market. >> a lot to digest in the days

ahead. hank from haverford investment, thanks again. >> a lot of people buying despite the fact there is a government shutdown for the first time in 17 years. >> sales numbers on general motors crossing. phil lebeau has that. >> kurt, the sales last month for general motors down 11%, worse than the estimate of 7%. characterize what you're seeing from the consumer out there right now. >> well, phil, it was an unusual month given the way the labor day holiday fell and all that business got pulled into august. having said that, you know, our retail business was down 5.8% -- actually up on a selling day adjusted basis. we reduced our incentive spend by about $400 a unit, our

average transaction prices were up over $1,000. so, you know, all said and done cadillac was up 10%, buick was up 6%. we feel pretty good about the month. >> is there any carryover effect, if will you, from what's happening in washington and the uncertainty about what's going on with the economy at all or are you guys totally separate from that because you're dealing with so much pent-up demand? >> i think the government shutdown issue, as long as it remains a short-term issue, is not going to have a big impact on our industry, phil. if you look at all the other, you know, fundamental economic factors, whether it's, you know, the housing data, fuel prices are pretty stable, the fed saying that they're going to delay tapering, we still see slow, steady, good growth in our history. >> final question.

general motors outsold ford by 2,049 vehicles this month. is it possible gm will hit a new low in the u.s.? >> you have to take a longer view on it. some of our competitors were extremely aggressive in the incentive space, if you get into the numbers. we like to look at probably the quarter. if you look at the quarrel, we were up 13%, industry was up 10%. all of our channels were up doub double digits and year to date we're up double digits in our retail sales. >> two other data points. toyota, a decline of 4.6% for the month of december and nissan, a decline of 5.5%. nissan better than what the street was expecting, toyota a

little worse than what the street was expecting. >> the government shutdown will not stop the health care law. the new health care exchanges are open today, not, though, without a lot of confusion. this very call center is answering people's questions about the exchanges. we'll take a look at how it's going. let's take a break. before we . it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before.

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state with enrollment beginning in health insurance exchanges, not without a lot of confusion, though. bertha is here. hi, bertha. >> we are at the new york state of health, some 300 people are manning stations. they just finished a press conference. officials are going to walk around. they've been open since 8:00 a.m. here in morning. so-called here in new york so good. they haven't had any hiccups then. a different story in maryland. the director in maryland saying they are having connectivity issues. they are apologizing for those issues and they hope to have them resolved by noon today. ibm is the lead contractor in building that exchange. we may want to watch that today.

here in new jersey computer signs is a lead contractor -- or rather here in new york, computer sciences is the lead contractor. but i've heard sporadic reports from people logging on, a person here said "your account couldn't be created at this time." here so far it's so good. we've seen a number of these operators here at the call center. they've taken an average of half a dozen calls in the first 90 minutes or so. these calls often take quite a bit of time because they really are walking people through the steps, not necessarily enrolling them today, carl, but they are starting to help people make sense of what their options are. we're going to be here live throughout the day. now back to you. >> such an important issue, bertha. remarkable even as this very issue is shutting down the

government. >> coming up, one of the hardest hit departments because of the shutdown is nasa. operations effectively brought to a halt today. "squawk on the street" is back in two.

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welcome back. we have our first tweet from carl icahn about his dinner last even with apple ceo tim cook, in which mr. icahn writes, ""had a cordial dinner with tim last night. we pushed hard for a 150 billion buyback. we decided to continue dialogue in about three weeks." i'm trying to get a little more

details on where they may have eaten. it appears there will be a continued dialogue between mr. icahn and mr. cook about the size of apple's buyback. last april apple talked about returning $100 billion to shareholder, $60 billion through a buyback and the rest through dividends. but $150 billion, well that, would be well above the current buyback, not that apple could not afford to do it, this is a company that even by lowe low estimates will generate 50 billion or more and that's a low estimate. we will see if other lenders will lend a voice to this.

carl icahn perhaps more tenacious, taken more seriously and being taken quite seriously by apple management. >> if i risk doing a little back of the envelope math here, give people a sense of why this is huge a huge number. $150 billion, we're talking in the range of 300 million shares. they've only got about 900 million share outstanding. you're uk abotalking about a ren of a third and that's massive. and it's extremely fluid. >> the shares of apple are up about 1.3%. they could do it. whether they choose to or not, of course, listen, there's got to be some concern in the apple camp that if we say no to him, does he try to run a proxy fight, could he potentially get a board seat? that would be fascinating.

even as we point out many times a sliver of stock. even top-ten holders doesn't have an enormous percentage given it's the largest market cap in the world. >> their performance has not been that great. do they try to tap capital markets again? >> that's a key question. >> shares are higher after the icahn tweet. and bill miller was asked what he thought about it. here's what he said. >> it's the biggest no-brainer in the history of the earth. that's what apple is right now to me. it makes no sense for it to trade where it, is seven times enterprise value to free cash flow, 10% simple free cash flow yield. if apple was a junk bond, it

would trade 40% higher. >> when we come back, former chairman of the council of economic advisers ed lazear will weigh in on the government shutdown. the dow is up 46. bny mellon combines investment management & investment servicing,

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well, going back one hour into trade here, the stories we're talking about, it's 7:33 on the west coast this morning, 10:33 down here on wall street. the ism manufacturing index posting a better than expected reading of 56.2. it is the highest level since april 2011. merck is the biggest gainer on the dow, up almost 2%, the drug company announcing that it's looking to cut 8,500 jobs. and walgreens is up today 3%. >> the question now is how long will the government shutdown last? john harwood is live with more on that. >> reporter: no definitive

answer to the question. it's so far been playing out exactly as we have expected given the way things locked up last night. this morning they rejected the last offer if they would defund, delay, block, mess with obama care. mitch mcconnell just took the floor in the senate to blame democrats for the situation saying this is a shutdown they've wanted. here's mitch mcconnell. >> democratic leaders in congress finally have their prize, a government shutdown that no one seems to want but them. >> reporter: but of course the comeback from democrats is that president obama was re-elected in 2012, having enacted the affordable care act, that's a more recent election than the 2010 one that brought the tea party into power in congress and steny hoyer said the democrats

simply can't compromise on destroying that law. >> the american people reelected the sponsor of that bill, barack obama. they re-elected and in fact expanded the majority of the united states senate that adopted that piece of legislation. so it is unreasonable and irrational, in my opinion, to simply reject the voters of america who made a choice just a few months ago and say if you have don't agree with us now, we're going to shut down the government, which is what has happened. >> reporter: on your question, carl and kelly, on how long this will last, just got an indication of a glimmer of possibility of how that is going to happen. got a tweet from a republican member of congress saying we fought the good fight, now it's time for a clean c.r., that's how you get the government back open. when a few more republicans

great with the representative from virginia, it will end. >> bureau of labor statistics has made it official. they will not public the jobs number on friday, unless the federal government resumes operations. in fact, they're not making updates to their site at all. we probably i assume will get adp, which will be our best picture of the market. >> people get frustrated with adp, it has changed methodology. it's a little more of a tell now. jobless claims one of the best gauges done by a slightly different department, the department of labor. unclear again as to what they're going to do. the longer the stretch, the less likely we'll get them at all. these are some of the most important pieces of information

on the economy, at a time when everyone, including the fed, is relying on them to guide policy. >> nasa, only about 6% of the employees at the johnson space center are cleared to work today. scott cohn is live with that story. >> reporter: good morning, kelly. houston wees houston, we have a problem. i should point out despite those numbers, in a lot of ways, it looks like a typical morning here. cars have been arriving in the morning and on into the date. the issue it appears we have a lot of contractors coming on to the site and employees because the official word is it would take about half a day to shut things down here. but to get specific information here is not easy. we called the press office here and we got this -- >> the johnson space center newsroom is currently closed due to a lapse in government

funding. we are in furlough status and therefore unable to respond to your call at this time. >> there you go. there is a real impact. but there's also an impact in terms of the numbers. the total workforce here at johnson, 3,200. cleared to work, 193. systemwide, only 550 cleared to work of 18,000. the donut shop worries if the shutdown goes into friday, that's their big donut day and they're not sure what they're going to do. there's a big government presence here. texas governor rick perry appeared earlier today on "squawk box." >> i don't look at it as a partisan issue. it's not good for america. it's not good for our men and women, regardless of where they

may be, regardless of your politics. the states are great laboratories of innovation, we're required to get our budgets balanced and work with both sides of the aisle. i don't understand why washington can't do that. >> reporter: and they probably share in that around here around nasa, where this is a big engine for this part of houston. it's going to be shut down very, very soon. carl, cal kelly, back to you. >> ed lazear is the former chairman of the president's council of economic advisers. he joins us this morning from palo alto. ed, it's great to you have back. we need you today. good morning. >> it's nice to be with you. >> the shutdown as we know it right now, what kind of impact on the labor market? general? >> obviously no one wants a government shutdown and it's not good for the labor market but we need to put it in perspective. first, let's compare it to the

sequester. everybody was very worried about the sequester. there's very little evidence in the macro numbers that since the sequester went into effect, there's any significant effect on the economy. so, again, you know, it's pretty hard to see the direct effects of a sequester. >> ed, just to be clear, if you do the math, if looks as though we've got x number of thousands of layoffs on the public versus private sector payroll and fiscal drag of 1.5 percentage points. that's not nothing. >> wait a minute. that's exactly where i was going to go. now let's take a look at the government shutdown. again, i'm not arguing the government shutdown is a good thing, but let's not go crazy with it. we don't want to exaggerate the effect. if you think about the size of the government labor force that's now on furlough, we're talking about a half a percent of gdp. if it lasted a month, take about a 12th of that.

you're talking about cutting the annual growth rate by about 1/20 of gdp. as long as we get back on track there and are no indirect effects, it's not a big deal. if this were to somehow derail transportation services in the united states, if our customs office and postal service were significantly disrupted, then we would expect some big effects. >> a lot of that depends as well on whether employees who are furloughed receive back pay. should it be the case that one of the first priorities is restoring the income they've lost? >> that's a question that congress has to answer. obviously congress has the power to do that and my guess is they probably will restore back pay. again, from the macro economic point of view, i don't think

that has a major effect on the macro economy. i think it has an effect on government credibility. and i would hate to see the government not stick to their word and treat the government employees adversely. it's not their fault. >> looks like we're not going to get nfp on friday, unless things change. people making jokes like we'll have to turn into china and make up things like china. is the number even complete? >> i don't pay a lot of attention to any one-month number anyway. if you recall, a few months ago i did a study of this, came out in the wall street journal, looking at the amount of error associated with one month's number and it's pretty significant. i wouldn't get hysterical -- >> certainly you're not saying because there's a margin of error of any economic reports

that we shouldn't have economic reports? >> no, not at all. i'm a big supporter of government data. i'm a strong advocate of looking at the jolts data, for example. it's a very important data series. all i'm saying is that one month is not going to make or break where we see we are in the labor market. the most important number to my mind is the employment rate. the employment rate is about 58.5%. it's been there for a very long time. that's not likely to change in any one month. so, again, if we waited a few weeks to get that number out, it probably wouldn't be the end of the world but, no, i certainly agree with you, i think government data is essential for knowing what we're doing and what kind of policies we should be engaging in. >> he says don't gethysterical but it doesn't take much to get us hysterical, as you know. >> coming up, how to get a piece

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welcome back. empire state reality trust is expected to announce the final pricing for its ipo this week. it will likely list down here at the new york stock exchange. kayla tausche joins us with more. >> reporter: you can see a view of the empire state building. it's been an ipo for years in the making. it originally filed in 2012. today it's expected to price 71.5 million shares between $13 and $15 a share, raising about $1 billion dollar and vol u the portfolio which owns and

operates about 18 properties in new york and midtown manhattan at about $3.4 billion. the trust had previously been own by 2,100 stakeholders and the controlling stake holder was peter malkin. one of those investors, kathy johnson, said her grandfather actually bought a piece in 1961 for a thousand dollars. it's worth multiple upon multiples now. she said she didn't want to see it go outside the family this week and her feelings are most. the court say 80% had approved it and they voted to go ahead with the ipo. as of this week, the public will get a chance to get a piece of the iconic skyline. it should price tonight and start trading tomorrow.

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welcome back to "squawk on the street." the new fiscal year for the country is in place and the santelli exchange isn't phubbeded phubbe phubbeded funded by the government so yes we are here. if i were king i would have done things a lot different. absolutely. i think there has been a lot of messiness in washington. but then again, we do have some rules. and let's look at things in a very superficial fashion. why is it that on the day of the new fiscal year for the country we have all these issues about the government shutting? it's because of appropriations, basically. you know, if you look at the origination clause of the constitution, it pretty much tells you why there's an hr in front of appropriation bills. house of representatives. okay? this is the way it was designed.

basically, they have the purse strings, okay? you have two types of programs. mandatory programs that really don't need appropriation bills, and then you have pretty much a lot of everything else that does. and, you know, if you want to talk about good old fashioned hockey like the movie "slap shot" some things have happened that i find fascinating. why has the house, for example, been sending bills to the senate, knowing the senate is going to send them back stamped no. i think it's a great thing. whether it's a filibuster of the bills, you know, the government recovery time has taken a bunch of shortcuts instead of filibustering the old fashioned way, they have a threshold of a higher number and that kind of is up supplants it. remember when boehner and the president were supposedly this close, yes, this close, to a grand bargain. how do we know? we have to take it on their word. i like the fact that the senate has these bills, whether they accept it or not. because it's good for history. it's good to see the process of going back and forth. i'll take it a step farther.

you know, if things like nasa or the panda cam are important -- i'm not saying whether they are or aren't, then they should bring appropriation bills, they can do them one at a time. they can do that. so i guess in the end, i think i'm glad that i'm not the king. you're probably glad i'm not the king. but i'm glad in general we don't have kings. because all of this is laid out pretty clear. and it should be no surprise when neither side can agree on a budget after five years, there's going to be some bumpiness. maybe they should reread the rules of the road. because you might call it messy. i call it a democratic republic. back to you. >> yeah, rick, a lot of people thinking perhaps we should rewrite the rules of the road at this point as well. >> then do it. call an amendment. but it's not called whiney, whiney, whiney and create a crisis. >> rick santelli in chicago this morning. thank you very much. next, bernie madoff's former home. >> it was in this very room that b bernie madoff told his sons he was running a ponzi scheme.

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breakthroughs in safety... in engineering... and technology. and now our latest creation breaks one more barrier. introducing the cla. starting at $29,900. ♪ welcome back. bernie madoff's penthouse is back on the market and the couple who bought it three years

ago are hoping to flip it for twice what they paid. robert frank joining us with more. >> the apartment is indeed back on the market and the owners are hoping that a brand-new look will help brighten its dark past. the seven-room duplex apartment on the upper east side is on the market for $17.25 million. that's more than twice what the current owners paid in 2010. toy tie con al kahn and his wife patsy bought the apartment from the u.s. government in 2010 for around $8 million in cash. they have done quite a bit of work on the place to scrub away the madoff memories. used to be dark and cave-like. they have taken away the heavy curtains and painted everything white. much brighter colors. the bones are impressive, great crafted wood floors. a massive wrap-around terrace that has views of central park, midtown and madoff's old office building, part of the fun. some things haven't changed, including the -- including

madoff's office, and its bathroom, which i think we have a shot. but, again, some of those old remnants of bernie's still remain. they're hoping for a big price gain here. >> two times, yeah. not bad for, what, three years' investment. >> and if you consider his palm beach house, which sold for $5 million, just traded for over $9 million. and, again, sort of similar owner, bought as investment. fixed it up. and they got almost the same increase as you see here. there is an advantage to those early investors in madoff properties. somebody made money from madoff. >> thanks, robert. robert frank. dow up 70. a couple headlines about italy, which we'll talk in a little bit. if you are just joining us this morning, here's what you missed earlier on. welcome to "squawk on the street." here's what's happened so far. >> the shutdown, every economist predicts, is going to be costly to the economy. dangerous to our national security. and undermine the competence of

the american people. >> obama care is at the heart of the issue. so if they got the votes, they're going to pass the votes. and the fact is, then we're going to find out whether or not obama care is going to function or not. >> the role of business is much more serious. there's like real things happening in business. down there, it's like hey, you know, no budget, no appropriation, no nothing. they should tell the tea party, listen, here's some -- this is a good substitute for u.s. debt. full faith and credit of the i apple nation, better cash flow to the federal government. >> there is the opening bell. >> asia continues to be strong. even japan, which has been sideways for a long time, we're seeing small, incremental growth. but you know what, it's better than where it was. >> normally right now we would be bringing you breaking news on ism manufacturing, and construction spending data. but because of the government shutdown, of course, we cannot

get the construction spending data today. >> if we can't have these heavy debates, why in the heck are we here? i'm not going to go along to get along, i'm going to do the best for the people that sent me. that's my job. day one of the government shutdown, we're live at post nine at the new york stock exchange with a check on why the dow is up 65 points. a couple things working here. the belief, perhaps, that maybe some republicans are beginning to warm to the idea of a compromise. that's still a very, very early narrative. more tangible are some headlines out of europe today that en rico, the prime minister of italy, berlusconi's secretary, the threats are a little bit lessened. we will see. which is the stronger dynamic, the conversations here with congress or the conversations over there in parliament. >> i love the contrast. italy can keep its government together. can we. the clock has stopped ticking as

of midnight last night, the u.s. government is pretty much closed for business. we'll take a closer look at what happens now and what it means for your investments. and now here's something the government and the government that is still open, and that's obama care. because, in fact, health insurance exchanges under the new health care law go live starting today. find out how the exchanges are running so far and what glitches they have run into along the way. we'll start with apple. the stock moving to its highs of the session after carl icahn tweeted about his meeting with ceo tim cook. josh lipton joins us were san jose with the details. josh. >> kelly, two big-name investors weighing in on apple this morning. start with carl icahn, the billionaire investor on twitter saying he had, a quote, cordial dinner with ceo tim cook last night and pushed hard for a $150 billion buyback, saying they'll continue their dialogue in three weeks. icahn saying in april apple announced a massive stock

buyback program, $60 million. by june, apple bought $16 billion worth of its stock. he wasn't the only one talking about twitter this morning. we also had bill miller on cnbc's "squawk box," talking up apple. take a listen to what he had to say about apple. >> it's the biggest no-brainer in the history of the earth, right? i think that's what apple is right now. it's like it just makes no sense for apple to trade where it is, seven times enterprise value to free cash flow. 14%, free cash flow yield in enterprise value. 10% simple free cash flow yield. if apple was a junk bond, it would trade 40% higher. >> apple in the green right now. down about 9% this year. hit a low of 385 on april 19th. but up just about 26% since then. guys, back to you. >> thank you very much, josh lipton. the big story, of course, is the senate voting to kill the latest house bill on the government funding this morning. now a question of the

implications of the shutdown and when it will be resolved. steve rattner, the chairman of willett advisers and tony fratto, managing director at hamilton place strategies. good to see both of you. >> morning. >> hi, carl. >> i think you probably called it, you said we would be heading here. how long do you think it will last? >> it will end sometime between now and october 17th. because october 17th, as you know, is the date that the treasury runs out of money, and potentially the u.s. defaults not just on its debt but payment to social security beneficiaries, medicare recipients and so on. so i think sometime between now and then. somehow the two sides get together and craft a compromise that deals with both the shutdown issues and hopefully the debt ceiling issues. that may be a rosie scenario. but that's what i think is logical, and indeed what we should all be rooting for. >> tony, you also believe this will last for weeks, not days. >> yeah. >> do we head into the 17th or not? >> that tells you where we are. steve's rosie scenario is what i'm thinking is the -- maybe

like the worst outcome. actually, the worst outcome is that they pass a clean cr right away and try to do this entire fight on the debt ceiling, which is a much more dangerous prospect. so in a way, i'm kind of hoping it does roll into a couple weeks, and there is a solution that includes the debt ceiling so we don't have that fight and that pressure on the debt ceiling. that would be awful for markets, awful for the economy, and really bad for the process. >> so there's something that tony and i completely agree on. >> a few things, steve, that we agree on in this. >> yeah. >> steve, can you explain, you know, for our viewers the impact here as you see it from breaching the debt ceiling, and specifically, i mean, are we talking about not paying investors, or are we talking about another government shutdown and potentially much more severe one? >> so, again, the shutdown and the debt ceiling, as i'm sure you all know, is different. the shutdown, we can see how that's unfolding. the debt ceiling means the

treasury has no money to it pay its bills. and what jack lew, the secretary of the treasury has said, their best legal advice is what they would do is simply pay bills as they come in, with whatever money is around. and so it means that payments to everybody from debt holders to social security recipients, to people who sell stuff to the government would all be delayed, as the funds are limited in that way. what i worry about, obviously, that constitutions a default by the u.s. on its obligations to social security recipients, for example, which is bankruptcy in another form. so what i worry about is if we go past that date, that you'll have another lehman kind of moment, i think. a moment where the markets just swoon. it's something we have never done before. we have always steered very clear of that. and as tony, i think, and i agree, that to me is the disaster scenario. >> hey, tony, everybody is talking about this tweet from representative scott lyingel. we fought the good fight. time for a clean cr.

some say wait until you see some bigger name republicans before you put some stock into it, but do you believe there is already a thaw, and if so, what are these republicans going to walk away with, if anything? >> i actually don't think there are enough that they're going to be able to walk away in the short term. i think we would like to see that. but as steve and i just said, all it does is shift this exact same situation to the debt ceiling and that's a much more dangerous place. so, you know, i actually think there is something to gain for republicans to have this fight as part of the -- as part of the cr and merge these things together, and i don't think you're going to get enough guys fall off. look, maybe, they see the wisdom of not having a shutdown fight, and they, you know, think about some other ways to deal with, you know, obama care issues or some other issues that are important to them. but i just don't see enough of them happening in the next day or two. >> all right. steve, tony, appreciate your insight. i'm sure we'll talk again soon. >> thanks so much. >> thanks.

the government is shutdown, but markets are rallying. and the question is why and how long will it last? jack abelynn is chief investment officer, and lance, editor of "the lance letter." guys, you heard that discussion. we are talking about merging the shutdown with the next fight on the 17th, over the debt ceiling. jack, one trader put it this morning, traders typically think things will work out after a couple days. is it a wait and see if there is no resolution at the end of the week, do equities start weakening or are people just not that worried about it? >> right now, kelly, i think investors aren't that worried about it. we did have some selling going into today, but i think that, you know, come friday, when we don't have a jobs report, come next week when we don't see some of the economic data, you know, it's really -- it is going to hit investors pretty much square right in the -- in their quote terminals. but i think that, you know, you're right. i think we have this debt ceiling debate.

a debt refunding due on the 15th. we should probably get that in. and i think d-day is probably november 1st when social security checks, made medicare benefits and other checks are due to individuals. and my sense is, if there is any delay there, i can assure you that tea party representatives are going to hear about it from their constituents. >> allen, we just heard steven ratner say if we breach the debt ceiling again looking now to the next fight coming up mid month, if we breach the debt ceiling, it would be as if the u.s. has hit bankruptcy in another form. do you agree with that? >> yeah, i think the debt ceiling is really the case. that's why you have the market up this morning, kelly, as far as, you know, it's more an october 17th, but i agree with jack. the longer this goes on, you know, the more worried investors will be. we think it's a buying opportunity, actually, if you do see weakness. i think this will get taken care of in the next two weeks. and the opposite of when we were last on six weeks ago, when we

were saying buy long term bonds and take profits in stocks, we just do the opposite. and as investors push into high-quality bonds and lower yields, we take profits there, and accumulate good quality stocks in any kind of weakness. >> hey, jack, i wonder, we talk so much about consumer discretionary, a lot of the names hitting new highs today, the ross stores, yahoo!s, chipotles, price lines. is that the only safe path here as we navigate these waters and what does it mean for q4? >> yeah, i mean, first of all, carl, consumer discretion is one of our favorite sectors, although i have to say it was cheap back in 2009. it's no longer cheap. in fact, consumer discretionary shares are trading at roughly a 50% premium to their peers. however, they do have a lot of favorable momentum. so we're going to continue to ride momentum and discretionary, watch some of the earnings results and see. you know, right now the market is trading off fed liquidity,

not earnings. and so my sense is, as we start rolling into, you know, q3 results, there is going to be a gap. and the question is, what are investors going to do, focus on the fed or focus back on fundamentals. and we'll have to see. >> all right. and those fundamentals shifting by the day. jack and allen, thank you both very much for your thoughts this morning. carl, as we watch this market rally. >> yes, it had. dow up 63. by the way, it is official. because of the government shutdown, there will be no jobs report this friday. our steve liesman has more on that back at hq. steve? >> carl, the bms putting out a notice earlier today, really confirming what we suspected all along, during the shutdown period, they will not collect data, issue reports or respond to inquiry. the story is that you saunder t government shutdown plan, the bls has three employees to which one tweeter joked to me, one of them to get the doughnuts, apparently. so we're not quite sure what all the employees are going to be

doing but it doesn't appear to be enough to collect data, which i understand has been collected for the report. the 12th and the 19th are two important dates there. some of the data does come in during the month. they have a cutoff time for preparing it. they also do quite a bit of crunching on the data, as well. and that's probably what would suffer. i do not know, and i can't say, carl, if, in fact, the shutdown were to lift, for example, today, if they could still get that report out. my guess is not. my guess is they would wait. the claims data will come out, because it comes from a separate agency that is separately funded, carl. that's the latest on this data. >> steve, sorry, that's a really interesting point. so you're saying the department of labor will still issue the claims data this thursday, and subsequent thursdays, or just this one? or how long can that go on? >> subsequent thursdays because of where it comes from. i also understand, kelly, the federal reserve, which as you know is working today, their data will come out. there is some question about the industrial production data on october 17th, because some of that may rely on government data. but for now, the regional fed

banks, as well as the federal reserve board, will be issuing their data. they are at work right now, and should be coming out with the information they have. but the claims data comes from a separate agency that i understand is not subject to appropriations. that's the key, right, is that if the agency is subject to an appropriation, which is why the fed is still working and which is why the claims data should be coming out. >> but just to be clear, steve, you think even if there were a clean cr, say tonight, that probably wouldn't save the jobs number friday. >> probably not. i know that they collect the data. that's only like half the game. there is a lot of number crunching. and honestly, carl, i can't tell you the extent to which that number crunching is automated. but my guess is they still have some work to do. there's quite a bit of review that happens to that data. and they would want the full week. the bls and other data agencies have moved up data announcements when they have had an opportunity. for example, they did some work to speed up the collection of the cpi data. and that has come out earlier than it used to come out.

so my guess is if they could come out with it earlier, they would. >> fascinating stuff, steve. weeping for the jobs report. i guess we'll have to wait for the next one. >> but hold on now. what's wrong oh with the adp data tomorrow, kelly? are you going to be satisfied by that? >> there's just -- all right. we'll have to evaluate it on its own merits. >> this is not insignificant, right? what's wrong with the private sector data? only that it doesn't always agree with the government data. but which one is right? >> i know, i know, i know. it's a good point. but nevertheless, we still -- we know the market trades off that bls report. and they won't have it this time around. >> now they'll trade off the private sector data. >> the adp must be loving it. steve, thank you very much. >> sure. the day has, nevertheless come. we have gone through protests, architects, government shutdowns, supreme court decisions and presidential elections. but despite the outcry, health care exchanges under obama care go live today. and we'll take a closer look at how they're working in the first couple of hours. see what hiccups you have encountered so far along the

way, strayed alet. but first, rick santelli keeping a close eye on markets this morning. rick. >> absolutely. yesterday the stock market was down, and treasury prices were up. it's the opposite today. was yesterday about what's going on with the government or was it just a normal last day of a trading quarter what should we do dealing with markets as they are today? we're going to ask kyle harrington all these questions, and see if his opinion matches what traders' opinions are. all at the bottom of the hour. [ shapiro ] at legalzoom, you can take care of virtually

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market is higher. dow up 63. take a look at what airlines are doing today, moving to the up side right now. dominic chu with more on that. >> well, carl, bill miller likes all kinds of stocks, but one sector in particular on his radar, so to speak, is the airline industry. over the course of the last year, airline stocks have soared. this particular airline index has risen by nearly 60% over the course of the past year. now, miller likes the airlines, but as an active manager, he looks specifically for outperformers. he said which ones earlier this morning on "squawk box." >> there is basically nobody out there that can really go after the market share of a united or delta, 25%. >> with you touch a jetblue?

i think they're all reasonably attractive but the legacy carriers are much more attractivive. united is four and a half times delta is five and a half times, reporting record profits. >> he likes the majors, the legacy carriers, the biggest names in the business. he has put his money where his mouth is. at the end of june, miller's opportunity trust fund counted delta and united. 3 to 4% waiting in his fund. as for how each of the stocks have done, delta has nearly doubled just this year alone. united continental is up a very respectable 27% or so. so not nearly as good as delta. but both of these stocks have certainly helped miller's fund performance, kelly, so far this year. back over to you. >> all right, dominic chu this morning. thanks very much. turning to the automakers, we're calling it a tale of two automakers. ford posting its strongest september sales since 2006. gm, in the meantime, seeing an 11% decline month over month. question is, where do they both

go from here. bob lutz, when we come back. ♪ oh rockin' down the highway (vo) you are a business pro.

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got some disappointing numbers in september in terms of sales for gm, but a different story for ford. better than expected results. bob lutz is former vice chairman of general motors, former chrysler president and cnbc contributor. bob, good morning. >> good morning. >> looking at some of these numbers. i'm looking at gm, toyota, nissan, probably the first year on your sales decline in more than two years. what's going on? >> well, it's predominantly the fact that september this year only had 23 selling days. and the big labor day weekend sell-a-thon, although it actually took place in september, but it was documented for august sales. so i think there's nothing wrong with automobile sales whatsoever.

not even with gm, which was slightly down. and that's explained by lack of availability of the new pickup trucks. and reduction in fleet sales, reduction in daily rentals. if you look at retails, gm is actually slightly up. so i don't think there are any signals there at all. demand is strong, and all of the domestics are doing extremely well. >> why are ford and chrysler able to beat back that calendar effect, if, in fact, that's what happened? >> well, it could be delivery, they could have had some fleet sales. there is a myriad of explanations and nobody is going to know until you really look at the data. but in the case of all three of them, it is not a lack of demand for anything. it's strictly a short september compared to last september. and ford probably. i don't know. they -- massive -- maybe selldown of 2013 pickup trucks. we really don't know until we look at the data. but in terms of sales per day,

what really koumts, counts, there is nothing wrong with overall demand in the industry at all. >> bob raised an interesting point, the narrowing gap between ford and general motors with regard to total number of sales. i believe it was narrowed in the range of 2,000 last month. how significant is it if ford takes over gm? is it all about the -- you know, does the number one, number two ranking matter? >> it looks like we might have lost bob's audio. we'll try again. when the tough questions come, then the audio goes away, right? >> i would imagine that, yes, for us, at least, the number one, number two spots will continue to matter. >> something tells me bob could have handled that question. our apologies to him. >> the bell is about to sound across europe. details oppon the close over th. interesting session in italy, speaking of politics today.

we'll recap that when we come back. stay with us.

welcome back. markets are about to close across europe. we're seeing a lot of green on the screens. stocks looking mostly higher as markets shrugged off concerns about the political stalemate here in the u.s. focus in particular on italy there, where there were reports the prime minister government coalition will survive, stocks range 2 to 3%.

britain and greece bucking the trend. across major european markets, italy up 3%. it looks like at the close. some decent gains for the periphery, at least for spain. france better than 1%. germany posting a strong session, up nearly 1%. again, as we mentioned, markets in london weaker, perhaps plagued more by concerns about what's going on across the shores. unilever one of the stocks. the giant lowering its sales growth expectations for the third quarter. citing a slow down in emerging markets. on the flip side, news from the car maker posting an 18% jump in french auto registrations last month. shares up, carl, almost 2%. >> all right. want to get a check on gold. incredible action on the yellow metal as the government shutdown begins. sharon epperson with hopefully an explanation. >> a lot of people scratching their heads trying to figure why gold is down more than $36 right

now and why such a plunge near the beginning of the floor session. a lot has to do with traders shunning riskier assets, all commodities down. but there are some that are saying there was at least one big seller right around the beginning of the floor session. and that kind of started the momentum. that's according to howard wen over at hsbc. also, the fact we went through technical levels and saw key sale stops as we broke through september lows. add to that the fact that when you think about the government shutdown, seen as anti inflationary, that is another thing pressuring gold prices. but there's not a lot on the fundamental horizon supporting gold or many other commodities, for that matter. and so the mantra seems to be when in doubt, get out. playing not only in the gold market, but also looking at silver down more than 4%, copper down significantly, the industrial drag going on there. and we're also looking at lower oil prices and there, of course, in the oil market, a lot of traders concerned with what will happen with the fundamental data due out this week in terms of oil.

and that is the inventory report that's due out tomorrow from the energy information administration. they tell us they are still going to be able to publish reports this week and next, and that the energy department will be operational until october 11th, at least they do have some appropriations money for that. but, again, there is still concern about if this shutdown lasts longer, what will happen to some of that key data that comes out of the energy department. back to you guys. >> sure, sharon. thank you very much for that. and bob pisani joins us on the floor. sharon is just talking about the selloff across the metals complex. here equities are doing all right. >> yeah, the government shuts down and we have a rally. and we have a rally across the board. i don't mean like heart attack is up or something like that. right across the board. let's talk about why we're getting that rally and other macro trends going on. look, everybody agrees on a general effect of the shutdown. the general point they're rallying around is every week that goes by, we shave off 0.1 to 0.2% on the gdp, a number a lot of analysts and strategists

have coalesced around. the markets have been up because there has been a lot of hope, just a hope, folks, that maybe they'll roll the whole thing up, roll the continuing resolution into a debt deal later on down the road. remember that 17th shutdown of october? and they'll make some grand deal, some kind of grand bargain. i think there is a lot that can go wrong. this seems awfully optimistic to me. i have been arguing the markets are complacent. this is one of the reasons the markets are up today and that's what everybody is talking about. let me focus on other things, there are a lot of things being obscured about what's going on because of the shutdown. like earnings, which is what we care about. global pmis improving, particularly in europe. the markets there are better. mortgage rates creeping lower at a nine-week low. positive macro trends out there. as for earnings, another low-bar quarter there. 8.3% for quarter three. that's not great but what we have been doing for a long time. folks, they're expecting an increase of 4% in revenues for q3. we haven't seen that kind of number in a long time. that would be a good one if we get it. let me show what the sectors are doing overall. everybody is up about 0.7, 0.8%.

it's a fairly broad rally that we're getting, including health care, tech, consumer, discretionary and energy. i want to focus on the hmo and health care sector, not only the insurance exchanges, but this was the start of the medicare advantage marketing season. putting out new plans, putting out new information, and the indications are the costs are going to go up. and i think this is one of the reasons that the hmos and medicare advantage plans are all to the up side today. let me also point out transports are very strong today. i think probably this is because of what's going on in the airlines. republic had some news there. they're going to sell frontier for $145 million. and overall, i had reports out to say august air freight demand up rarely nicely, about 3.6%. so the bottom line here is, the street is just buzzing about some kind of perhaps grand deal. they're going to roll up the continuing resolution and the debt ceiling somehow and make a deal because october 17th is going to be right upon us. again, i think this is just a lot of wishful thinking right now.

i could tell you that's what everybody is talking about. what i want to see is a path to see that happen. i haven't seen any coherent plans. all i have seen is a lot of wishing and hoping. but that's what everyone is talking about. >> took the words out of my mouth. bob pisani. >> let's get to rick, the santelli exchange. >> hi, kyle. kyle harrington. welcome, kyle. >> how are you, rick? >> very good. okay. now i want you to clarify something for me. pretty much yesterday, no matter what you looked at regarding the markets, the issues of the government were the culprit and the markets were down. today we actually do have a government shutdown and the markets are up and i think that's not making some people very happy. but can we explain this, that the market just is looking past this? we have a lot of fish to fry. $16.9 trillion. couldn't yesterday have just been a normal end of the

quarter? usually we're rebalance whatever goes up, the whole quarter is down and whatever goes down for the whole quarter is up. that pretty much explains stocks and bonds yesterday. and pretty much they're acting normal today. what's your take on all of this with the government in the markets? >> you know, rick, i think it's a compilation of things, okay? firstly, you know, the market doesn't like uncertainty and ambigui ambiguity. so i think yesterday there was this rush to are we going to actually, wow, shut down divisions of the united states government and with that, people sell stocks and go into protection of principle mode. today we actually have an official government shutdown. and so there's a little bit more clarity, believe it or not, on, you know, the direction that -- the direction that washington, d.c. is going to go in. now, if you look historically at government shutdowns, you'll see that the markets actually behave okay. and i think that that's because there is some clarity to things.

we are going to shut down this division or that division. now, i don't think it's going to be long-lasting. but when you add other things in, rick, like syria, okay, what we're going to do there. just the natural volatility this year with sluggish gdp growth and a jobs report that we've obviously just cancelled for friday, but the jobs reports historically have been very weak. and i think ben bernanke made the exact decision i would make with regard to doing no tapering. when you add all of that together -- >> we have less than a minute left and i'm sorry, what you say makes sense and sounds like a lot of other people are saying. doesn't make any sense to me. doesn't explain yesterday. doesn't explain today. and as far as the fed, maybe if the fed didn't set a pick for both houses in the government because of their inaction, there would be more action. but i'll ask a more specific question. what do you think is going on with gold today? >> well, i think, you know, there is -- people are -- there's been a mixed bag with respect to gold. do i rush to gold as a result of, you know, the dollar

devaluation and the government's potential to print more money. but i think that for a portion of one's portfolio, regardless of what it does today or what it does tomorrow, rick, i think that for a portion of your portfolio, you should own the precious metals for a hedge against where i think the dollar is going. >> kyle, thank you for being our guest today. a lot of questions. i don't know that anybody has the exact answers, unless they can pull everybody that put on a trade lot in fact 48 hours. carl, back to you. >> rick, great point. thank you very much. so the u.s. government pretty much closed for business, at least broad swaths are today. the question is, until when. and it depends on how long both sides plan to stand their ground. policy james langford of oklahoma weighs in live, next. [ bagpipes and drums playing over ]

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carl, see you in 20 minutes. what. >> a show you're going to have, the president speaking and carl icahn. the republican ballots with president obama over funding the government and the new health care law will continue to play out in the coming days. we're joined by the house republican policy chair, congressman james langford of oklahoma. congressman, good to have you with us. good morning. >> good morning to you. >> you've been quoted today as saying, i don't even know how to guess in terms of where negotiations go from here. i assume no more clarity at this moment, as when you were quoted this morning? >> no, exactly the same spot. it's a little ironic the last vote we took as a house, let's go to conference with the senate, sit down and get in the room, talk to each other. and this morning, for some bizarre reason, they tabled that and said we don't want to talk with the house. i can't even begin to guess then what do we do if we're not going to sit down and talk about things. because obviously, we have serious issues we have to address. we're stuck. it's incredibly childish. >> what are you telling members

of the party, at least, who say we made our point, and maybe it is time to start talking about the clean cr. you're nowhere near that. >> no, i don't think we're anywhere near that. the challenge is, there are real issues that have to be addressed. and i've had lots of folks from the senate that have said to me, let's just deal with this at another time and we have said for the last three years, we have sent over 40 bills, one at a time to raise different issues with the affordable care act, every one has been ignored and now there is a sense of we don't want to do it now, as well, let's keep going on so we can ignore it in the future, as well. we have to deal with issues. i know there are folks that are real fans of the affordable care act, but there are some very real problems we want to raise and address and deal with. >> representative, the research group this morning said usually whichever party is most united is the party that comes out on top. given the comments we heard and a tweet we saw from representative scott rig who says there is a time for a clean cr, but the fact you're saying no way would suggest if anything continues to fragment, not pull

together. isn't there a risk that means you're not going to be able to achieve what any in the party would like to see at this point? >> yeah, all of this is a risk. none of us wanted to go to a shutdown. as your viewers know well from just calling or interacting, when is really not a government shutdown. this is a government slow down. everything is slower. there are workers in my office that are furloughed today and offices all over the country. but basic operations are still continuing. we phubbedfunded military, civi working with the military, continuing with normal. so we have this slow down that is occurring that people are aware, it is a problem. now the issue is, how do we get out of this. i would say the first thing is to sit down and have a conversation. let's start working things out rather than just ignoring each other. the senate talking to itself, the house talking to itself and no one is talking to each other. >> we have seen national poll numbers that look at whether americans are blaming republicans or the president. but i wonder, the ratio of your own constituents who say you're doing the right thing versus the wrong thing. is anyone pressuring you in your

own district of oklahoma to move past this? >> well, here's an interesting statistic for you. last night i had a telephone town hall from my office during the middle of the conversations where we called thousands of people across the district, nonpartisan, random numbers across the district, had a couple thousand people on the call, did a flash poll on the call and i asked simply the question, do you have the opinion that i should keep negotiating, even if it means a government slow down to deal with issues of the affordable care act or just do a clean cr. in my district, 74% of the people in that poll said keep negotiating to deal with at least some of the issues of the affordable care act. 26% said no, do a clean cr. now, i understand, that's not a scientific, that's a flash sampling across my poll. but it's pretty stark. >> yeah, 74 to 26 is a -- those are poll numbers, scientific or not, that will get your attention. how do you think they feel if we get closer to the 17th? >> yeah, that's the great unknown. obviously, we have a debt ceiling hanging out there, as well. there are a lot of large issues we have to deal with now. major entitlement reforms, the

sequester still. all these financial things that are all piled up here together. our hope was to be able to deal with this, have it dealt with, and then to be able to move on. and, quite frankly, we felt like our last proposal was pretty reasonable. it just put members of congress in the white house into obama care and gave the individual protections from the penalties for the first year, the same as businesses have. that was our last proposal. we thought that's fairly straight forward. for folks that say you want this giant thing, that's actually pretty small, and even that -- the senate just tabled and said we won't discuss it. >> at the same time, congressman, the new quinnipiac poll out this morning, i'm sure you've seen it. talks about how american voters reject the gop shutdown strategy by a 3 to 1 margin and the dems up in the congressional race. >> all those things, the dynamics are there. the senate has to evaluate how long politically they can hold out and say we refuse to talk to the house. the house has to be able to step out and say what's a reasonable proposal the american people will accept. we feel it's reasonable. obviously, much has happened

last night. people right now are just talking about shutdown or slow down. they don't really know what the last proposal was. the last proposal was pretty simple. put members of congress in the white house into the exchanges and give the american people the individuals a one-year delay in the penalties, the same as businesses have been given. so it's a one-year, simple, clean, delay on just the penalties and put members of congress in the white house into it. how hard is that? >> we're going to find out how hard it is when the president speaks in just about 30 minutes. congressman, thanks so much for your time. interesting insight from your district, too. james langford of oklahoma. now while the rest of the government is shutting down, health care exchanges are still going live today. and so far, requests for information are trending way above expectations. in fact, many of the sites are struggling to stay live. we'll go straight to one of the call centers working to handle that demand when we come back. bny mellon combines investment management & investment servicing,

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well, the day has finally arrived, and we're not talking about the shutdown. we're actually talking about the health insurance exchanges under obama care, which are live with open enrollment beginning today. so how are things running this morning? bertha coombs taking a closer look for us in albany, new york. bertha, good morning. >> reporter: good morning, kelly. you know, if there was a question -- a question about whether they built these things, whether people would come to the

exchanges, certainly answered this morning. the big issue this morning is the volume of activity we're seeing on the exchanges. this is the new york state of health call center. they had a soft launch on this call center, september 16th. they have had about 10,000 calls before today. this morning in the first two hours alone, they had a quarter of that volume. the wait times have now come down to about two minutes or so. the website still experiencing volume issues this morning. in the first two hours, they had 2 million hits and the director of new york state of health admits, that was far more than they anticipated. >> it was certainly anticipated there would be a very high volume, 2 million hits in a couple hours, honestly, exceeded even our estimates of the initial need. >> they are trying to increase the capacity as they go along this morning. we're seeing the same experience in areas like maryland, where they are set to go live at noon.

they postponed going live this morning, because connectivity issues. we are also hearing complaints about the federal exchanges. the federal exchanges have also experienced tremendous volume, if you log on to health care.gov, you will probably get some sort of message saying we apologize about the wait times. you can go and call the call centers. federal officials sources say they are trying to fix those problems as we speak. they expect in the next couple hours they will be able to do that. we'll see what's happening on the west coast, because a lot of exchanges going online at 8:00 a.m. eastern time. so we're starting to get california right now. this is not just a test for the government but a lot of i.t. contractors that have built these big exchanges, accenture, one of the biggest building in california, ibm in maryland, and here in new york it's computer sciences. we'll get an update, guys, from the feds at about 2:00 about how it's going on the federal exchanges. back to you. >> bertha, really quickly. are the balloons for the rollout?

>> they are for the rollout. i think they were anticipating a lot of press here today. victor, if you can take a look, that's just a little bit for -- this is d-day, they're opening, they said to themselves congratulations. all things considered, they feel like it's going pretty well. >> right. i know some people who would like to pop those balloons. but talk about having a reporter on the ground. bertha coombs, who knows a lot about this stuff. bertha, thank you so much. let's get over to dominic chu and check out this crazy story on genetics. >> shares of the medical testing company, myriad up sharply. this stock got clobbered yesterday after a report that one of its tests for breast and ovarian cancers was getting a reduced medicare reimbursement rate so not good. myriad said today that low rate being quoted was the result of a clerical error and that's going to be fixed in the next couple weeks. so that stock was also upgraded to a buy rating. so, again, some miscommunication, carl. that's why those shares were down yesterday and up big today. back over to you. >> all right. thank you very much, dom.

stocks close to the highs of the day. dow up 71 points despite the shutdown in washington, d.c. the venerable, it says, art cashin, will cut through the sound and fury, explain what this event means for all of us and the market, in just a moment. [ horn honks ]

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. welcome back. markets are rallying today. the dow up 71 points. better than 1% for the nasdaq. and this, in spite of the fact that large portions of the government are shut down today. let's ask art cashin, director of floor operations at ubs. good morning. >> good morning. >> a lot of people want to know what to make of what's happening today. what would you say? >> i would call it the armistice rally. you started out cautiously this morning, particularly in the dow, and some of the multinationals. and then nobody sprang in front of the tv screen. we didn't have boehner, we didn't have reid, we didn't have mcconnell. and half an hour we're going to get the president and we'll see if the tone changes at that point. but when they're not on the screen, people can hope that maybe the talking behind the scenes and maybe things are working out. and then you've got a big bonus in europe. the italian situation seems to be far calmer than we thought. and on a completely different note, i think gold may be down

because of golden week in china. they have already cut down the imports in india and now without china for the next week or so, things are pulling back. >> that's a really good point. i hadn't thought of that. a lot of people are using the shutdown as anti growth, anti inflation. i mean, is that too much to extrapolate? >> well, you know, maybe i'm not ready for that kind of mental callistheni callisthenics. but i would stick on my side. you don't see that comparison in other aspects. this was heavily the precious metal, silver and gold. what. >> do you make of the move in the tenure. twitter fans want to know. now it's basically been moving lower. what happens now amid all of this and concerns about the debt ceiling? >> well, initially, you know, it's almost like dessert. a little bit is good and a lot can be troublesome. so you moved away from the triple wire up 3%.

you have been pulling back. and now you're getting with the flight to safety, you know, with the shutdown and other things, you're improving. if they continue to see interest rates go lower, after the flag to safety, then people are going to say wait a minute, maybe the economy isn't really that good. so we have to worry. one thing we do know is that tapering is put way, way back on the back shelf for now. >> that's what's so interesting. stocks trading higher on qe, be even though metals sell off and growth looks worse. it sounds like decoupling. >> it is to a degree. you're going to see it, particularly with asia, and, you know, don't forget, most of the growth in metals and others were in asia and the growth that was there. and nothing else than a week off in china can take away some of the demand. >> finally, we're not going to get nfp, apparently on friday. so how much is the market rally around adp, whatever we get? >> well, i think it will give it some anticipatory credit.

but i think the negotiations are now far more important than the number itself. >> art. >> thank you so much. >> my pleasure. >> markets have been holding on to some gains. we'll see whether it's italy or the u.s. and, of course, eye can coming up with wapner back at hq on the halftime. let's get back to scott and the half. >> carl, thanks so much. welcome to the halftime show. here's what we're following. a leg up, famed investor bill miller returned 47% this year. we go inside his portfolio to find his winning plays. the great debate. merck on the move today but our traders can't agree where it goes from here. so they're going to square off a little later. it's "halftime" and let's play the action and get to our top story. the long awaited dinner between apple ceo tim cook and activist investor carl icahn. it finally happened last night in new york city. carl icahn tweeting the following this morning. had a cordial dinner with tim last night. we pushed hard for a $150 billion buyback. we decided to continue